As of April 14, 2025, rising U.S.-China trade tensions, decreasing Chinese economic indicators, and changing supply-demand dynamics are all contributing to the downward pressure on world crude oil prices. West Texas Intermediate (WTI) is currently trading at $61.23 per barrel, while Brent crude futures decreased to $64.47 per barrel, representing a major drop of about $10 per barrel since early April.
Market Overview
Price Movements
Brent Crude: Increased by $1.00 to $65.20 per barrel
WTI Crude: Increased by $0.90 to $62.40 per barrel
Since the beginning of April, both benchmarks have seen a significant drop of about $10 per barrel, mostly as a result of growing trade conflicts and worries about the expansion of the world economy.
Escalation of the Trade War
China has placed duties of up to 125% on U.S. imports in response for U.S. tariff rises, increasing the trade war between the two countries. Critical tech equipment and semiconductors may soon be subject to new tariffs, even though the United States has given tariff exceptions for specific electronics.
Economic Measures
A unstable future is revealed by China’s economic data, as declining inflation rates point to a decline in consumer demand. Despite a 4.8% year-over-year increase in crude oil imports in
March, supported by record Iranian oil shipments, this has sparked worries about the nation’s ability to maintain its oil import levels.
Dynamics of Supply and Demand
Demand Issues
A weak economy is indicated by declining Chinese inflation figures, according to Moody’s Analytics. This and the growing trade war point to a possible drop in the world’s demand for oil.
Modifications to the Supply
U.S. energy companies have trimmed the number of active oil rigs, the largest reduction since June 2023, in response to expected declines in demand.
The role of geopolitics
Exports of Iranian Oil
Amid worries over Iran’s nuclear program, the United States is thinking about additional restrictions on Iranian oil shipments. However, recent U.S.-Iranian discussions in Oman have been seen as fruitful and friendly, which may reduce some geopolitical tensions.
Projections and Forecasts
Outlook for Goldman Sachs
Goldman Sachs expects a drop in world oil prices through the end of 2026, pointing to OPEC+’s increased supply and the global trade war’s higher probability of a recession. The bank predicts that WTI would decline from $59 to $55 during the same time period, while Brent crude will average $63 per barrel in 2025 before dropping to $58 in 2026.
In conclusion
The crude oil market is at present facing a challenging environment that includes shifting supply-demand dynamics, economic uncertainty, and trade tensions. In order to make wise judgments in this unstable environment, stakeholders should continue to be on the lookout for global events and economic data.
Until then, Happy Trading!
Commodity Samachar Securities
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